Citizens Property Insurance Corporation is Regressive and Risky

In a 2015 paper, Kyle D. Logue of The University of Michigan and Omri Ben-Shahar of the University of Chicago show that the amount of subsidy a household receives from Citizens increases with wealth. Insurance premiums for more expensive beachside properties are actually the most subsidized, turning the political justification for Citizens’ existence on its head.

Citizens Property Insurance Corporation was formed by the Florida Legislature in 2002 for the purpose of serving Florida’s residual property insurance market. Its creation was justified by the argument that middle-income residents have a tough time purchasing insurance in a hurricane-prone state like Florida, and public subsidies were needed to even the playing field for these struggling families. Recent economic research, however, has shown that Citizens is actually a regressive program that disproportionately benefits the wealthy.

Dark green areas are the most subsidized. From Logue and Ben-Shahir (2015).

In a 2015 paper, Kyle D. Logue of The University of Michigan and Omri Ben-Shahar of the University of Chicago show that the amount of subsidy a household receives from Citizens increases with wealth. Insurance premiums for more expensive beachside properties are actually the most subsidized, turning the political justification for Citizens’ existence on its head. Figure 1…